Mark WeisbrotAl Jazeera English, 6 de septiembre, 2012En Inglés

Dean Baker
Eureka (The Times of London), September 6, 2012

September 7, 2012

AP did a fact check of President Obama's speech that went way over the top in finding grounds for criticisms and implying misrepresentations when there were none. To start, it jumped on President Obama for claiming that he would use the savings from winding down the war to pay down the debt and create jobs:

"The idea of taking war savings to pay for other programs is budgetary sleight of hand, given that the wars were paid for with increased debt. Obama can essentially 'pay down our debt,' as he said, by borrowing less now that war is ending. But he still must borrow to do the extra "nation-building" he envisions."

There is not much sleight of hand here. President Obama is working off a baseline set by the Congressional Budget Office (CBO) that assumes war spending continues over the next decade. If he doesn't intend to continue this spending then he is freeing up money relative to this baseline. AP may not like this method of scoring, but it is absolutely standard in Washington policy debates. Changes are measured against a baseline. President Obama is just doing exactly what figures in both parties routinely do in discussing the budget. It would be more appropriate to make its complaint against CBO than against President Obama's speech.

The piece then takes issue with President Obama's claim that the economy has created 500,000 manufacturing jobs over the last 29 months and that we could create 1 million over the next four years.

"Obama has claimed an increase of some 500,000 manufacturing jobs over the past 29 months. But this is cherry picking by the president. From the beginning of Obama's term 3 1/2 years ago, manufacturing jobs have declined by more than 500,000, according to the Labor Department's Bureau of Labor Statistics. Manufacturing jobs have been on a steady decline for nearly two decades.

Even though there has been a modest uptick in manufacturing jobs this year, unless there is a major turnaround, it seems unlikely that Obama's goal of 1 million new manufacturing jobs can be reached by his target date of 2016."

The 29 months is not exactly cherry picking. The economy was in a free fall losing 700,000 jobs a month when he took office. It eventually bottomed out and has been gradually recovering over the last two and half years. It is hardly cherry picking to refer to the pace of job growth in a recovery. (Does AP think Obama is responsible for the recession?)

In terms of manufacturing job growth going forward, 1 million jobs in four years is a pace of just over 20,000 a month. That is hardly exceptional. Furthermore, if we don't run trade deficits of $600 billion a year (4 percent of GDP) indefinitely, we will almost certainly close the gap in large part with manufactured goods. Reducing the deficit by 1 percentage point of GDP would imply more than 1 million new manufacturing jobs.

September 7, 2012 (Jobs Byte)

The NYT bizarrely told readers that the value of the dollar is "almost entirely outside of American politicians’ control," in an pseudo fact check of the Democratic convention speeches last night. This is clearly wrong.

First, the actions of the Federal Reserve Board could have an enormous impact on the value of the dollar. Raising and lowering interest affects the willingness of foreigners to hold dollar denominated assets. This means that whether intended or not, monetary policy will affect the value of the dollar. However the Fed could take steps with the explicit goal of raising or lowering the value of the dollar. 

To be specific, it could lower interest rates in order to lower the value of the dollar. Furthermore, if it chose it could amplify the impact of a drop in interests on the value of the dollar by explicitly targeting a lower valued dollar.

For example, if Bernanke were to announce that the Fed would continue to buy long-term bonds until the dollar had fallen by some fixed amount (e.g. 20 percent) against a basket of currencies, then it is likely that many investors would sell their dollar assets in order to get out before the price declined. This would help bring about the targeted price decline. 

The Fed could even carry this a step further. It could directly intervene in international currency markets, buying up hundreds of billions or trillions of dollars of foreign currency by selling dollars. This would also push down the value of the dollar.

While the Fed is independent of the executive branch and Congress, the president, with the approval of the Senate, does appoint 7 of the 12 voting members of the Fed's Open Market Committee. A president (or a majority in Senate) could insist that every new person appointed to the Fed must be committed to lowering the value of the dollar. The president and Congress could also try to pressure current members to follow this course.

Eileen AppelbaumEconomic Intelligence (U.S. News & World Report), September 7, 2012

My colleague John Schmitt provided an excellent overview of my recent paper about organized labor in the United States and Canada, “Protecting Fundamental Labor Rights: Lessons from Canada for the United States.” In that post, John laid out the basic argument – that there are two key differences between the United States and Canada that have allowed the unionization rate in Canada to remain stable over the past half century while it has plummeted in the United States. The first of these differences is the process by which workers form unions in the two countries, which is what I want to take a closer look at in this blog post. In a second post in the days to come, I'll look at the other key difference – how bargaining impasses are handled after the initial formation of a union.

Both the U.S. and Canada have two different processes for forming unions – mandatory elections and card check. Under mandatory elections, unless an employer voluntarily recognizes a union, employees who want to form a union at their workplace must file a petition for an election with the labor board – a government agency that enforces the collective bargaining laws – showing support of at least 35 percent of the workforce. (It's 35 percent in the United States and 35-45 percent in Canada depending upon the province.) This is usually done with signed authorization cards, and employees or unions on their behalf will typically gather much more support than this before filing the petition, usually around 65 percent. The labor board, after verifying the cards against payroll records of the employer, will schedule and hold an election in which employees can vote on whether or not to form a union.

Under card check, the process is more streamlined. If employees are able to show majority support (ranging from 50-65 percent), the labor board will simply verify the signed authorization cards, and, if there is the required majority of the proposed bargaining unit, the board will certify the union. If there is less than the required level of support, the labor board will schedule and hold an election. In both mandatory elections and card check, once a union has been certified by the labor board, the employer is required to recognize the union and both the employer and the union are required to “bargain in good faith.”